UnitedHealthcare will eliminate 381 jobs in metro Phoenix on Jan. 2 after losing a lucrative federal contract to provide health care to military families.

The Minnesota-based health insurer this week informed employees their positions would be eliminated within 60 days, a notice required by the federal Worker Adjustment and Retraining Notification Act.

UnitedHealthcare said the layoffs affect employees who support the company's Tricare contract for active-duty military members, veterans and their families. The affected workers, including office, administrative and call-center employees, mainly work at the company's office at Dunlap and 22nd avenues in Phoenix.

In July 2016, the U.S. Department of Defense announced it would reorganize the Tricare military health program to reduce it from three regions — north, south and west — to two — east and west. The federal program awarded a five-year, $17.7 billion west region contract to Centene Corp.-owned Health Net Federal Services.

Under the contract, Centene will provide services for 2.9 million Tricare beneficiaries in 21 Western states, including Arizona, beginning Jan. 1, 2018.

UnitedHealthcare filed a protest with the Government Accountability Office, but the GAO last November upheld the contract award to Centene.

"In the wake of DOD’s decision, UnitedHealthcare is helping affected employees get new jobs internally and remains committed to having a substantial presence through our other services in the state of Arizona," said Bruce Jasurda, vice president of communications for UnitedHealthcare's military and veterans division.

Company to help laid-off employees

UnitedHealthcare is one of Arizona's largest private health insurers, providing coverage for businesses, Medicare, Arizona's children's rehabilitative services program and other health-related units. The company employs more than 8,600 in Arizona, including contract workers, the company said.

Despite issuing pink slips to 381 employees, the company has been able to find jobs for nearly 200 other workers who would have been displaced by the loss of the contract, the company said.

UnitedHealthcare said it will attempt to find positions for displaced employees as well as provide virtual job fares and tips on resume writing and job interviewing. Displaced workers will receive severance pay based on their position and length of employment, a spokesperson said.

UnitedHealthcare will service the existing Tricare contract through Dec. 31.

A Tricare media representative did not immediately answer questions about the contract switch. St. Louis-based Centene did not respond to questions about its plans to service the contract.

Arizona ties to Tricare

Arizona has long had a role in the Tricare's regional contract. Valley-based TriWest Healthcare Alliance was Tricare contractor from 1996 until 2013, when UnitedHealthcare took over the region.

Although UnitedHealthcare's Tricare military and veterans unit is based on Minnetonka, Minnesota, the company hired more than 500 in metro Phoenix.

Meanwhile, TriWest secured another government contract for the Department of Veterans Affairs' Choice program, which formed in 2013 to provide veterans timely referrals to private-sector doctors, hospitals and health.

In September, U.S. Sen. John McCain, R-Ariz., demanded answers about the Veterans Choice program following reports that suggested it could run out of money before the end of this year despite receiving $2.1 billion in emergency funding one month earlier.